Hi.

I have been cashing my payroll check at the bank which it is drawn on (where my employer banks, B of A) for several years now. I do not have an account there. I do this for convenience only, cashing my check on payday, rather than waiting until Saturday to go to my own bank. The other day, when cashing my check at my employer's bank (where check is drawn on), they told me starting July 1st they will charge me $5 each time I cash my check, since I do not have an account there. Is this allowed? My employer is in NY and NJ and the particular B of A branch in question is in NJ.

Our local B of A has been doing this for a few years now. I'm in Florida.

I am the original anon who posted...found this from June 2004...I wonder if other states have similar laws for employers...

Many California employers were surprised to learn recently that they could be open to legal action because of a law that requires them to ensure that their employees can cash their paychecks without being charged a fee. The issue intensifed when two businesses filed lawsuits against two banks that impose the fees.

Karis House, a nonprofit, has sued Bank of America, while Ability Answering-Paging Service has sued Wells Fargo.

They argue that banks are opening employers to liability under section 212 of the California Labor Code (in effect since 1911) by charging $5 fees for nonaccount holders to cash checks, even if those checks come from an account holder. For those working minimum wage jobs, the fee can be equivalent to an hour's work, according to California Sen. Dean Florez, D-Shafter, who introduced two bills to stop the practice. The bills were pending as of press time.

James King, an employee of Karis House, said he discovered the fees while intervening on his employees' behalf with Bank of America. An employee asked King for cash instead of the reimbursement check he was about to issue her because she'd been charged $5 previously to cash a $13 check. King said he didn't know about section 212 or protections for his employees from paying paycheck cashing fees when he contacted his bank to protest the charge.

Orig. Anon,
It is an interesting article and California has had this issue in the news with both sides arguing their side. Since you are dealing with a bank in NJ, you will need to determine the laws applicable to that state.

Some banking laws apply to banks in every state and some are state laws that only affect the banks in their state. To further complicate matters, some state laws have no impact on a National bank whose home office is in another state.

Perhaps a NJ banker will be able to shed additional light on your issue. As for MS, we can charge a non-customer check cashing fee -- some banks do and some do not.

Unfortunately, the rationalzation to collect a fee I believe is flawed. Banks are not cashing checks for non customes that are dawn on their bank. They are cashing them for their customers for which they do charge their customer fees to maintain their account. Those fees include a charge for processing debits to the customers account REGARDLES of how the checks are presented.

Now I know banks charging these fees will never agree to that thought process. IMO the boundaries of business morals and ethics are being pushed very hard by some banks. That eventually brings in the law makers to pass more laws for bankers to adhere to which just adds to the compliance officers burden.

Thanks for the feedback. I will have to see if similar laws in NJ and if they even apply to B of A. Next time I cash my check I will mention that they are cashing the check for their customer, whom they already charge maintenance fees, etc. I cannot wait to see their response. Thanks again.

Orig Anon, I would bet big bucks the b of a has already researched the law. I worked there for many years and they don't do anything without double checking first. If you have ANY account (no fee credit card) they will not charge you.

I doubt there is any law that prohibits the fee being charged. I also doubt you will have any sucess getting the fee waived. Frankly, as a non customer they don't care what rational you use, and the clerical staff you are talking to have no authority to change the banks policy.

Your best bet is to complain to your boss that his bank charges you to cash his payroll checks and that you want the $5.00 added to your check to cover the cost of collecting your wages. Enough people complaining to the boss may at least get him to talk to management at the bank. If his account relationship has any clout its possible the fee would be waived.

Either that, or if the boss has to go through his employees complainig every payday, he may decide to change banks to where the fee is not charged.

Thanks everyone for your responses.

You have two alternative courses of action, other than grousing to your employer. The first is to wait until Saturday and deposit the check into your account at your bank, where you won't be charged for the privilege. The second is to ask your employer if it offers direct deposit of payroll. Then you can have the check deposited in your bank account on Friday, and pull any needed cash for the weekend from an ATM.